Is a lease/purchase a viable option?
We are building a house and we need to close by Sept 1. Our current home had been on the market for 6 weeks. We have buyers that desperately want to buy our house, but so far, they have been unable to sell their home. We have known this couple for several years and would love to find a creative solution that would work for both of us.
I'm thinking of a lease/purchase. They purchased their home in 2005 at the peak of the market. Due to current market conditions they have lost what little equity they had. They also don't have a whole lot of cash. They are very solid professionally and are pre-qualified for a mortgage on our home with 5% down. They are unable to take a large enough price reduction on their home to allow them to have the cash to meet the 5% downpayment requirement.
If they rented their home for a year or two it would allow them to pay down the mortgage to a point where they are no longer net negative. They can comfortably support the lease payments on our home until they are able to sell their home.
Is this a viable option? Anyone have a creative solution? At this point we have no other buyers and showings have slowed considerably. We're getting very nervous.
Although not a perfect solution, we are in a position where we could close on our new house without the proceeds from the sale of our current house. It would hurt, but we could do it.
Anyone have experience with a lease/purchase. I would really appreciate your thoughts. Thanks.